The Origins of Mathematical Finance and the Efficient Markets Hypothesis : Louis Bachelier's Post-1900 Writings on the Theory of Speculation

Louis Bachelier's 1900 dissertation on the theory of speculation has been recognized since its 1964 translation into English as a landmark in the emergence of the modern analysis of mathematical finance, efficient markets, and stochastic processes. His writings on the theory of speculation over the next four decades have received much less notice. This paper examines Bachelier's continued efforts to extend, reformulate, and popularize his approach, with particular attention to the three chapters on speculation in his 1912 treatise on the calculus of probabilities (dismissively and uncomprehendingly reviewed by J. M. Keynes in a review of five books on probability)and his 1938 monograph on speculation and the calculus of probabilities, which is here translated into English for the first time